McqMate
Chapters
| 1. |
Largest Life Insurance Company in India is: |
| A. | The New India Assurance Company Limited |
| B. | Life Insurance Corporation of India (LIC) |
| C. | United India Insurance Company Limited |
| D. | National Insurance Company Limited |
| Answer» B. Life Insurance Corporation of India (LIC) | |
| 2. |
The term risk may be defined as: |
| A. | The possibility of adverse results flowing from any occurrence. |
| B. | The possibility of an outcome being different from the expected one. |
| C. | Both a and b |
| D. | None of the above |
| Answer» C. Both a and b | |
| 3. |
Risk of premature death is a |
| A. | Financial risk |
| B. | Personal risk |
| C. | Dynamic risk |
| D. | Subjective risk |
| Answer» B. Personal risk | |
| 4. |
Insurance is a risk management technique involving: |
| A. | Risk retention |
| B. | Risk avoidance |
| C. | Loss control |
| D. | Risk transfer |
| Answer» D. Risk transfer | |
| 5. |
Organisations are mainly concerned with managing |
| A. | Pure risks |
| B. | Speculative risks |
| C. | Personal risks |
| D. | None of the above |
| Answer» A. Pure risks | |
| 6. |
The first step in risk management process is |
| A. | Risk avoidance |
| B. | Risk identification |
| C. | Insurance |
| D. | Risk evaluation |
| Answer» D. Risk evaluation | |
| 7. |
Main emphasis of risk management is on ___________. |
| A. | Risk retention |
| B. | Reduction of cost of handling risk |
| C. | Risk transfer |
| D. | all |
| Answer» B. Reduction of cost of handling risk | |
| 8. |
Cost of loss control is |
| A. | cost of reducing frequency and severity of loss |
| B. | cost of paying workers compensation |
| C. | cost of self-insurance |
| D. | all |
| Answer» A. cost of reducing frequency and severity of loss | |
| 9. |
Following are the risk management methods: |
| A. | Insurance |
| B. | Hedging |
| C. | Derivatives |
| D. | All of the above |
| Answer» D. All of the above | |
| 10. |
Which of the following types of risks best meets the requirements for being insurable by private insurers? |
| A. | Market risks |
| B. | Property risks |
| C. | Financial risks |
| D. | Political risks |
| Answer» B. Property risks | |
| 11. |
All of the following are financial risks which may be faced by business organizations EXCEPT |
| A. | Interest rate risk. |
| B. | Commodity price risk. |
| C. | Product liability risk. |
| D. | Currency exchange rate risk. |
| Answer» C. Product liability risk. | |
| 12. |
Risk management follows a systematic process which involves……….steps. |
| A. | Two |
| B. | Three |
| C. | Four |
| D. | Five |
| Answer» D. Five | |
| 13. |
Risk management information system is not useful in one of the following |
| A. | Reporting |
| B. | Hedging |
| C. | Claim adjustment process review |
| D. | none |
| Answer» B. Hedging | |
| 14. |
Event of high frequency and low severity fall in the self-retention category |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» A. True | |
| 15. |
When as event is stated to be possible, it has a probability between |
| A. | Zero and one |
| B. | Zero or one |
| C. | None of these |
| D. | Both of the above |
| Answer» A. Zero and one | |
| 16. |
If the most impossible event is assigned a value of zero, then most inevitable event is assigned a value |
| A. | Of one |
| B. | Between zero and one |
| C. | Between zero to 10 |
| D. | Between 10 to 100 |
| Answer» D. Between 10 to 100 | |
| 17. |
Which of the statement are true? A. Risk retention and risk transfer are some of the techniques to manage risks. B. Implementation is one of the steps in risk management |
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» C. Both the statements | |
| 18. |
Which of the statements are true? A. Loss prevention and loss reduction mean different things. B. Risk maybe transferred by contract. |
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» B. Statement B. | |
| 19. |
Which of the statements is correct? A. The simplest way to deal with a risk is to avoid it. B. This technique is always possible and practical. |
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» D. Neither of the statements | |
| 20. |
Which of the statements is correct?
|
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» C. Both the statements | |
| 21. |
When should a risk be avoided? |
| A. | When the risk event has a low probability of occurrence and low impact |
| B. | When the risk event is unacceptable -- generally one with a very high probability of Occurrence and high impact |
| C. | When it can be transferred by purchasing insurance |
| D. | A risk event can never be avoided |
| Answer» B. When the risk event is unacceptable -- generally one with a very high probability of Occurrence and high impact | |
| 22. |
Risk management can be defined as the art and science of _________ risk factors throughout the life cycle of a project. |
| A. | Researching, reviewing, and acting on |
| B. | Identifying, analyzing, and responding to |
| C. | Reviewing, monitoring, and managing |
| D. | Identifying, reviewing, and avoiding |
| Answer» A. Researching, reviewing, and acting on | |
| 23. |
When a firm buys insurance to cover losses caused by riots, the firm is |
| A. | Transferring risk. |
| B. | Avoiding risk. |
| C. | Assuming risk. |
| D. | Reducing risk. |
| Answer» A. Transferring risk. | |
| 24. |
Suppose a project has many hazards that could easily injure one or more persons and there is no method of avoiding the potential for damages. The project manager should consider __________ as a means of deflecting the risk. |
| A. | Abandoning the project |
| B. | Buying insurance for personal bodily injury |
| C. | Establishing a contingency fund |
| D. | Establishing a management reserve |
| Answer» B. Buying insurance for personal bodily injury | |
| 25. |
The cause of loss or a contigency that may cause a loss is known as-------------- |
| A. | Hazard |
| B. | peril |
| C. | Risk |
| D. | Uncertainty |
| Answer» D. Uncertainty | |
| 26. |
Which of the following is the similarity between insurance and gambling: |
| A. | The amount of loss to be paid is known before hand. |
| B. | Promise to pay on the happening of the event |
| C. | Both the parties win on happening of an event. |
| D. | Both are enforceable at law. |
| Answer» A. The amount of loss to be paid is known before hand. | |
| 27. |
The business of insurance is related to protection of: |
| A. | savings |
| B. | status |
| C. | profits |
| D. | economic value of assets |
| Answer» D. economic value of assets | |
| 28. |
The concept of insurance is |
| A. | to share losses by many |
| B. | to make money out of death |
| C. | to earn interest |
| D. | to earn a status |
| Answer» A. to share losses by many | |
| 29. |
Insurance covers the risk of the most certain event - |
| A. | Death of a person |
| B. | protection of the childhood |
| C. | protection of old age |
| D. | all of the above |
| Answer» B. protection of the childhood | |
| 30. |
Insurance cover |
| A. | Protects assets |
| B. | prevents loss |
| C. | reduces the impact of loss |
| D. | insures immortality |
| Answer» C. reduces the impact of loss | |
| 31. |
The company doing insurance business is called: |
| A. | mutual funds |
| B. | non-banking firm |
| C. | banking company |
| D. | an insurance company |
| Answer» D. an insurance company | |
| 32. |
All of the following are disadvantages of using insurance EXCEPT |
| A. | There is an opportunity cost because premiums must be paid in advance. |
| B. | Considerable time and effort must be spent selecting and negotiating coverages. |
| C. | It results in considerable fluctuations in earnings after a loss occurs. |
| D. | Attitudes toward loss control may become lax. |
| Answer» C. It results in considerable fluctuations in earnings after a loss occurs. | |
| 33. |
All of the following can be classified as casualty insurance EXCEPT |
| A. | Marine insurance. |
| B. | General liability insurance. |
| C. | Workers compensation insurance. |
| D. | Burglary and theft insurance. |
| Answer» A. Marine insurance. | |
| 34. |
Insurance eliminates or decreases the uncertainty associated with occurrence of an event |
| A. | Correct |
| B. | Wrong |
| C. | Partially correct C. |
| D. | Totally misleading |
| Answer» C. Partially correct C. | |
| 35. |
The insurance plays a role in the economic development of the country in following ways: |
| A. | Release capital for new investments. |
| B. | The job potential increases |
| C. | Money collected is invested in infrastructure |
| D. | All of the above |
| Answer» D. All of the above | |
| 36. |
Insurance brokers are governed by |
| A. | Sale of Goods Act |
| B. | Agency Law |
| C. | IRDA Act. 1999 |
| D. | Mercantile Law |
| Answer» C. IRDA Act. 1999 | |
| 37. |
A reinsurance of insurance refers to ________. |
| A. | line. |
| B. | retention. |
| C. | retrocession. |
| D. | cession. |
| Answer» C. retrocession. | |
| 38. |
IRDA Act. 1999 defines insurance intermediary as one including also |
| A. | Insurance broker |
| B. | UTI Agent |
| C. | Sarpanch |
| D. | Medical Examiner |
| Answer» A. Insurance broker | |
| 39. |
Insurance reduces the extent of financial loss connected with uncertain events |
| A. | True |
| B. | False |
| C. | To the extent of insurance cover |
| D. | Does not reduce the loss at all |
| Answer» C. To the extent of insurance cover | |
| 40. |
The business of insurance is related to protection of |
| A. | Savings |
| B. | Status |
| C. | Profits |
| D. | Economic value of assets |
| Answer» D. Economic value of assets | |
| 41. |
Which of the following is the similarity between insurance and gambling? |
| A. | The amount of loss to be paid is known beforehand |
| B. | Promise to pay on the happening of an event |
| C. | Both the parties win on happening of an event |
| D. | Both are enforceable at law |
| Answer» A. The amount of loss to be paid is known beforehand | |
| 42. |
What is underwriting in Insurance ? |
| A. | Process of investing the premiums which insurance provider collect from insured parties. |
| B. | A claim arises on the occurrence of a specified event |
| C. | Process by which insurers select the risks to insure and decide how much in premiums to charge for |
| D. | The ratio of losses and expenses to premium |
| Answer» C. Process by which insurers select the risks to insure and decide how much in premiums to charge for | |
| 43. |
Insurance Sector in India is regulated by IRDA. What is full name of IRDA? |
| A. | Insurance Regulating and Development Agency |
| B. | Insurance Rules and Development Authority |
| C. | Insurance Rules and Deployment Authority |
| D. | Insurance Regulatory and Development Authority |
| Answer» D. Insurance Regulatory and Development Authority | |
| 44. |
When was IRDA Act passed? |
| A. | 1972 |
| B. | 1999 |
| C. | 1989 |
| D. | 2000 |
| Answer» A. 1972 | |
| 45. |
Which of the following is the main objective of IRDA: |
| A. | To take care of the policy holder interest |
| B. | To open the insurance sector for private sectors |
| C. | To supervise the activities of intermediaries |
| D. | All of above |
| Answer» A. To take care of the policy holder interest | |
| 46. |
The general insurance business in India was nationalized in the year. |
| A. | 1976 |
| B. | 1956 |
| C. | 1983 |
| D. | 1972 |
| Answer» D. 1972 | |
| 47. |
The main role of an underwriter in a non-life insurance company is normally to |
| A. | assess the acceptability of particular risks |
| B. | certify a loss when claims are submitted. |
| C. | design the structure of the products to be offered. |
| D. | negotiate with the industry regulator. |
| Answer» A. assess the acceptability of particular risks | |
| 48. |
Akshat is a relatively cautious person. In insurance terms, this will normally increase the likelihood that he will |
| A. | be considered an above average insurance risk. |
| B. | be considered a below average insurance risk. |
| C. | require insurance cover. |
| D. | require reinsurance cover. |
| Answer» C. require insurance cover. | |
| 49. |
Which of the statements is correct? A. Insurance is a transfer of risk mechanism. B. Insurance gives physical protection to assets. |
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements. |
| D. | Neither of the statements |
| Answer» A. Statement A. | |
| 50. |
Transfer of rights and remedies of the insured to the insurer after indemnity has been effected is called __________. |
| A. | Insurable interest. |
| B. | Subrogation |
| C. | Proximate clause. |
| D. | Money back policy. |
| Answer» B. Subrogation | |
| 51. |
Which one of the following comes under miscellaneous insurance? |
| A. | Marine Insurance |
| B. | Motor Insurance |
| C. | Fire Insurance |
| D. | Group Insurance |
| Answer» B. Motor Insurance | |
| 52. |
__________ policy matures on the assured death or on his attainment of a particular age whichever occurs earlier. |
| A. | Endowment. |
| B. | Money back. |
| C. | Joint life |
| D. | Single premium. |
| Answer» A. Endowment. | |
| 53. |
On the death of the bread-earner, two losses occur in the family-one is loss of human life and the other |
| A. | Earning power of family |
| B. | Loss of insurance |
| C. | Loss of investments |
| D. | Loss of bank deposits |
| Answer» A. Earning power of family | |
| 54. |
The principle of indemnity is applicable to _______ only. |
| A. | Life Insurance |
| B. | Personal accident insurance |
| C. | Proximate Cause |
| D. | Property insurance |
| Answer» D. Property insurance | |
| 55. |
Insurance is based on the principle of _______. |
| A. | co-operation. |
| B. | Democracy |
| C. | Equality |
| D. | welfare |
| Answer» A. co-operation. | |
| 56. |
______ are those terms, which are written on the policy. |
| A. | Express Warranties |
| B. | Implied Warranties |
| C. | Memorandum Warranties |
| D. | Valuation Clause |
| Answer» A. Express Warranties | |
| 57. |
Which of the following statements is true: Under a fire policy |
| A. | Insurance is a transfer of risk mechanism. |
| B. | Insurance gives physical protection to the assets. |
| C. | Statement A |
| D. | Statement B |
| Answer» A. Insurance is a transfer of risk mechanism. | |
| 58. |
Which of the following statements is correct? |
| A. | One of the methods of risk retention is by way of voluntary excess or deductible available under the policy. |
| B. | Another method of retention of risk is to absorb small losses as normal operating expenses of business. |
| C. | Statement A |
| D. | Statement B |
| Answer» C. Statement A | |
| 59. |
Which of the following types of loss exposures are best met by the use of avoidance? |
| A. | low-frequency, low-severity |
| B. | low-frequency, high-severity |
| C. | high-frequency, low-severity |
| D. | high-frequency, high-severity |
| Answer» D. high-frequency, high-severity | |
| 60. |
Consideration on the part of the life insured in respect of a life insurance contract is |
| A. | A promise to take a new policy |
| B. | The insured’s promise to pay the premium under the policy. |
| C. | The payment made towards premium by the insured. |
| D. | Proposal completed and signed by the person. |
| Answer» B. The insured’s promise to pay the premium under the policy. | |
| 61. |
The policy holder’s duty to disclose material fact lies at the time of |
| A. | Taking a policy |
| B. | Revival of policy |
| C. | Reinstatement of surrendered policy |
| D. | All of the above |
| Answer» D. All of the above | |
| 62. |
Which of the following is an evidence of insurance contract? |
| A. | Policy of insurance |
| B. | Payment of premium |
| C. | Cover note |
| D. | Acceptance of proposal |
| Answer» A. Policy of insurance | |
| 63. |
Which of the following statements is correct? |
| A. | People do not see the need for life insurance as top priority. |
| B. | People hesitate to buy life insurance because they prefer to enjoy the present. |
| C. | Both the statements are correct. |
| D. | Both the statements are wrong. |
| Answer» C. Both the statements are correct. | |
| 64. |
The principle of utmost good faith does not apply to : |
| A. | Facts of common knowledge |
| B. | Facts of Law |
| C. | Facts which are not material for underwriting |
| D. | All the three kinds of facts mentioned above. |
| Answer» D. All the three kinds of facts mentioned above. | |
| 65. |
Which of the statement is correct? A. Existence of the subject-matter is an express condition. B. There are no implied conditions in insurance contracts |
| A. | A. is correct |
| B. | B. is correct |
| C. | Neither is correct |
| D. | Both the correct |
| Answer» C. Neither is correct | |
| 66. |
The clause which sets out the essence of the contract is |
| A. | The Preamble |
| B. | Recital Clause |
| C. | Conditions |
| D. | Operative Clause |
| Answer» D. Operative Clause | |
| 67. |
Endorsement can be used in a policy giving effect to |
| A. | Renewal |
| B. | Change in premium |
| C. | Change in subject-matter of insurance |
| D. | All of the above |
| Answer» D. All of the above | |
| 68. |
Policy stamp needs to be affixed on the |
| A. | Endorsement |
| B. | Cover note |
| C. | Policy |
| D. | All of the above |
| Answer» C. Policy | |
| 69. |
Cover note can be issued by |
| A. | Agents |
| B. | Development officers |
| C. | Insurers |
| D. | All of the above, depending on company guidelines |
| Answer» D. All of the above, depending on company guidelines | |
| 70. |
What is the minimum age for a person to effect a contract of insurance? |
| A. | 25 years |
| B. | 18 years |
| C. | 12 years |
| D. | 20 years |
| Answer» B. 18 years | |
| 71. |
Insurable Interest is defined by: |
| A. | The Insurance Act |
| B. | The Contracts Act |
| C. | By IRDA |
| D. | Not defined in any written law |
| Answer» D. Not defined in any written law | |
| 72. |
Which of the following is true? A. Policy form is a legal document. B. The warranties inserted in a policy safeguard the interest of the insured. |
| A. | A is True |
| B. | B is True |
| C. | Both are true |
| D. | Neither is true |
| Answer» B. B is True | |
| 73. |
In case of life insurance, insurable insurance should not exist? |
| A. | At the inception of the policy. |
| B. | At the time of a claim. |
| C. | At the time of every renewal premium payment. |
| D. | All the above occasions. |
| Answer» A. At the inception of the policy. | |
| 74. |
Notification of Alterations in Risk is a condition |
| A. | Precedent to liability |
| B. | Subsequent to liability |
| C. | Precedent to the contract |
| D. | Subsequent to the contract |
| Answer» A. Precedent to liability | |
| 75. |
A person’s insurable interest in his own life is: |
| A. | Unlimited |
| B. | Limited |
| C. | 10 times the husband’s salary |
| D. | None of the above |
| Answer» A. Unlimited | |
| 76. |
Occupation is important for risk classification because of: |
| A. | Income earned by individual |
| B. | Tension, stress and worries given by workplace |
| C. | damage caused by pollution at work place |
| D. | both b and c |
| Answer» D. both b and c | |
| 77. |
A complete proposal form contains the information about |
| A. | Moral hazard |
| B. | Physical hazard |
| C. | Personal history of proposer and identity of the property insurance |
| D. | All of the above |
| Answer» B. Physical hazard | |
| 78. |
Valuation in life insurance means |
| A. | The process of arriving at the profit of a life insurance company |
| B. | The process of determining the net premium for a life insurance policy |
| C. | The process of arriving at the bonus in a life insurance company |
| D. | The process by which the value of all the existing policies is ascertained in a life insurance company. |
| Answer» D. The process by which the value of all the existing policies is ascertained in a life insurance company. | |
| 79. |
Endorsement can be used in a policy giving effect to |
| A. | Renewal |
| B. | Change in Premium |
| C. | Change in subject matter of insurance |
| D. | All of the above |
| Answer» D. All of the above | |
| 80. |
Fire Insurance is based on the principle of ? |
| A. | Utmost good faith |
| B. | Insurable interest |
| C. | Indemnity |
| D. | Co-operation |
| Answer» C. Indemnity | |
| 81. |
Which is the consequential loss in the fire insurance? |
| A. | loss of profit on account of fire |
| B. | property damaged by matter used for extinguishing fire |
| C. | loss due to collapse of walls at the time of fire. |
| D. | none |
| Answer» A. loss of profit on account of fire | |
| 82. |
Fire insurance is a personal contract because |
| A. | it is a contract of utmost good faith |
| B. | it is a contract of insurable interest |
| C. | the contract does not insure the safety of the property but only the insured from pecuniary loss due to fire |
| D. | none |
| Answer» C. the contract does not insure the safety of the property but only the insured from pecuniary loss due to fire | |
| 83. |
Which of the statements is correct? Under a fire policy A. Insurance is a transfer of risk mechanism. B. Insurance gives physical protection to assets. |
| A. | Statement A. is correct |
| B. | Statement B. is correct |
| C. | Both are correct |
| D. | Neither is correct |
| Answer» B. Statement B. is correct | |
| 84. |
Which of the following is an accidental loss by fire? |
| A. | loss of profit on account of fire |
| B. | loss on account of delay |
| C. | Damage caused by a fire brigade in carrying out its fire fighting operation. |
| D. | Loss of market |
| Answer» B. loss on account of delay | |
| 85. |
The major law governing marine insurance in India is |
| A. | English Marine Insurance Act, 1906 |
| B. | Marine Insurance Act, 1963 |
| C. | IRDA Act, 1999 |
| D. | General Insurance Nationalisation Act, 1972 |
| Answer» C. IRDA Act, 1999 | |
| 86. |
Can a marine policy be assigned? |
| A. | Can be assigned before the loss |
| B. | Can be assigned after the loss |
| C. | cannot be assigned |
| D. | both a and b |
| Answer» C. cannot be assigned | |
| 87. |
Constructive total loss in marine insurance means |
| A. | same as total loss |
| B. | a partial loss |
| C. | the loss caused is so huge that the cost of repairs would exceed the actual amount, so it is adjudged as a total loss |
| D. | a loss which is not covered |
| Answer» A. same as total loss | |
| 88. |
Group insurance is ideally suited for covering |
| A. | Affluent persons in the society |
| B. | Weaker sections of the society |
| C. | Employer-employee groups |
| D. | Both B. and C. |
| Answer» D. Both B. and C. | |
| 89. |
Unemployment insurance is a component of |
| A. | ESI Act |
| B. | Social Security Act |
| C. | Worker’s Compensation Act |
| D. | None of the above |
| Answer» B. Social Security Act | |
| 90. |
Which is the right time for taking life insurance? |
| A. | When you are about to get married |
| B. | Soon after you have got married |
| C. | Just when you are joined a new job |
| D. | All the three ‘times’ are right |
| Answer» D. All the three ‘times’ are right | |
| 91. |
Which type of insurance protects the policyholder against loss or damage to a ship or its cargo on the high seas? |
| A. | Hazards |
| B. | Inland |
| C. | Transportation |
| D. | Mariney |
| Answer» D. Mariney | |
| 92. |
Which of the following is not covered under General Insurance? |
| A. | Theft insurance |
| B. | Marine insurance |
| C. | Life insurance |
| D. | Fire insurance |
| Answer» C. Life insurance | |
| 93. |
Which principle suggests that insured should try to minimize the loss of his property even if it is insured? |
| A. | Principle of indemnity |
| B. | Principle of Mitigation |
| C. | Principle of Proximate Cause |
| D. | Principle of contribution |
| Answer» B. Principle of Mitigation | |
| 94. |
Group insurance is ideally suited for covering |
| A. | Affluent persons in the society |
| B. | Weaker sections of the society |
| C. | Employer-employee groups |
| D. | Both B. and C. |
| Answer» B. Weaker sections of the society | |
| 95. |
Fire insurance can be taken in respect of __________ |
| A. | movable property only |
| B. | immovable property only |
| C. | both movable and immovable properties |
| D. | persons only |
| Answer» C. both movable and immovable properties | |
| 96. |
All of the following can be classified as casualty insurance Except____________. |
| A. | marine insurance. |
| B. | general liability insurance. |
| C. | workers compensation insurance. |
| D. | burglary and theft insurance. |
| Answer» A. marine insurance. | |
| 97. |
________ is a social device for eliminating or reducing the loss of society from certain risk. |
| A. | Premium |
| B. | Policy |
| C. | Insurance |
| D. | Contract |
| Answer» C. Insurance | |
| 98. |
Insurance provides security against ________ |
| A. | Risk |
| B. | Losses |
| C. | Both (a) & (b) |
| D. | None of them |
| Answer» C. Both (a) & (b) | |
| 99. |
The ________ is the party who agrees to compensate the other person against possible losses. |
| A. | Insured |
| B. | Insurer |
| C. | Assured |
| D. | None |
| Answer» B. Insurer | |
| 100. |
The ________ is the party who gets his life or property insured against risks. |
| A. | Insured |
| B. | Insurer |
| C. | Assurer |
| D. | None |
| Answer» A. Insured | |
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